The Effect of Perceived Risk on Online Shopping in Jordan

Abstract

Consumers’ perceived risk has been considered as a fundamental concern of decision making process during online shopping. For the purpose of this study, perceived risk is defined as the potential for loss in pursuing a desired outcome from online shopping. The study aimed to examine the effect of perceived risks (financial risk, product risk, time risk, delivery risk, and information security risk) on online shopping behavior in Jordan. To investigate the hypotheses of the research, data was collected from online shopping users; a survey was conducted with a sample size of 395 online shoppers among consumers who previously purchased online and mainly from the main popular online stores in Jordan, methodology was done using SPSS 17 and Amos 18. The study revealed that financial risk, product risk, delivery risk, and information security risk negatively affect online shopping behavior. The results also showed that the other two dimensions, perceived time risk, and perceived social risk have no effect on online shopping. The study has an important managerial implication; it provides marketers with the importance of consumers risk perception in order to adopt adequate risk-reduction strategies in the internet shopping environment.

Keywords: Perceived Risk, Risk Dimensions, Online Shopping, Electronic Commerce, Jordan.